Councillors — and the public — are facing a marathon session Thursday when a joint meeting of the city’s finance and corporate services and planning and housing committees consider all the moving parts in Lansdowne 2.0.
The deal is so complicated, and so many people want to have their say, that the meeting is very likely to continue into Friday. More than 70 delegations have signed up so far.
On the agenda: A staff report that recommends councillors approve a revised concept plan for a new event centre, new north side stands and mixed-use development at Lansdowne Park, as well as the financial funding strategy that increases the budget authority by $86.5 million, for an estimated total of $419.1 million.
Councillors on the committees will be asked to approve a number of measures, including an $18.6 million expenditure to build up to 140 parking spaces beneath the north side stands to be leased to the residential tower owners. They will be asked to give Mayor Mark Sutcliffe the leeway to pursue additional capital funding from the federal and provincial governments estimated at between $20 and $50 million.
The joint committees will also consider approving staff-recommended zoning by-law and official plan changes needed to allow the project to go ahead. That includes amending to the official plan to permit building heights of up to 40 stories. The original Lansdowne 2.0 proposal called for three towers with 1,200 residential units on the site, but the revised plan has reduced that to 770 units in two towers.
But it’s not over until it’s over.
Last-minute arguments are being pitched. As of 10 a.m. on Wednesday, 72 public delegations had signed up to speak at the meeting. More are likely to sign up before the meeting begins at 9:30 a.m. Thursday.
Delegations have until 8:30 a.m. to register by email, said Caitlin Salter-MacDonald, the city’s manager of council and committee services. With each delegation receiving a maximum of five minutes to speak, the joint committee faces more than six hours of presentations.
Capital Ward Coun. Shawn Menard, whose ward includes Lansdowne, said he knows of at least 20 motions being crafted by councillors. The meeting will almost certainly continue into Friday, he said.
Menard said the only other recent issue that attracted comparable public attention was the official plan, which resulted in an expanded urban boundary and new intensification targets.
Of the concerns Menard has received for residents, many have been around better uses for the city’s money, including generating affordable housing, he said.
In July 2021, city council heard that Lansdowne facilities, especially the north stands, needed to be replaced. Council asked the Ottawa Sports and Entertainment Group (OSEG) to work with city staff on proposals and cost estimates.
The city and OSEG partnership have experienced eight years of net income losses. According to a city staff report, Lansdowne attracted four million visitors in pre-pandemic 2019. Both the City and OSEG agree that Lansdowne Park needs to attract at least five million visitors a year.
Cash flows generated from the operations are distributed in a system referred to as “the waterfall” which governs the distribution of net positive cash flows and is slated for restructuring in Lansdowne 2.0. Under this closed system, OSEG is responsible for any deficits that may accrue from operations, according to the city.
The deal will require at least $331.3 million in new 40-year city debt, including the new debt from the parking under the north side stands, said Menard.
He contends that while some have argued that there is a cost of doing nothing, there is no stadium emergency, and no reason why the proposal should not be subject to more due diligence.
The existing arena and stadium have been assessed repeatedly over the past 15 years and city has stated that the north side stands and TD Place Arena are safe, useable and can be maintained for the rest of of the Lansdowne partnership, he said.
Menard argues that on Lansdowne 2.0, ‘no’ is an option. There is no stadium emergency, and given the dismal economic performance of the first phase of Lansdowne’s redevelopment, it wouldn’t hurt to have more due diligence, he said.
“A ‘no’ vote would simply reject the current Lansdowne 2.0 proposal as presented. It would not be a vote to end the partnership,” Menard said. “OSEG would remain bound to its partnership obligations. Should they choose to default for convenience, the city would not need to repay the $160 million, and the city would have right-of-first refusal for the teams.”
The financing for Lansdowne involves multiple revenue streams, including the sale of air rights, incremental future property taxes, a ticket surcharge, and improved financial returns expected from the additional retail and residential spaces.
OSEG’s new investments in the events centre and north stands are projected to enhance overall cash flow by reducing operating and life cycle costs, increasing event numbers, and augmenting revenues from premium seating and parking, according to the staff report.
Under the proposal, 40,000 square feet of existing retail attached to the north stands would be demolished and replaced with 107,000 square feet of retail space in a podium attached to the new residential towers.
The new retail space would be 75 per cent debt financed by OSEG through the waterfall, and the remaining 25 per cent would be the responsibility of the city.
A financial due diligence report from Ernst & Young LLP noted that Lansdowne 2.0 involves a substantial upfront investment from the city with most of the returns expected in the later phases of the project.
But the report also noted that based on a review of comparable jurisdictions that have undergone similar transformations, mixed-use developments “have been observed to encourage follow-on investment in surrounding areas, which has the potential to support future regional economic development.”
This could include additional retail space, accommodation services, office space, entertainment venues and new residential towers in surrounding areas.
The EY report also outlined a number of scenarios that could have an impact on the project, ranging from a local or global economic downturn, interest rate risk and increased construction costs to local competition.
“The potential for a new arena and event centre for the Ottawa Senators NHL franchise following the recent purchase of the team by Michael Andlauer could pose a threat to the number of events held at the Lansdowne site, whether this new project be completed at the LeBreton Flats site or at any other centrally located area of the city,” noted the E&Y report.
The success of the sports teams based at Lansdowne is also a factor, said the report.
“Attendance and fan engagement are directly linked to team performance; poor performance on the field or on the ice will result in lower ticket sales, and associated revenues (concessions, merchandise, etc.) will be negatively impacted.”
Decisions made by the joint committee are scheduled to be before city council on Nov. 10.